By: Erin M. Jacobson, Esq.
This article was first published on Billboard.com.
There has been a lot of buzz recently about songwriters and artists (or their heirs) recapturing copyright ownership of their songs – and youcanbelieve the hype. Copyright law provides a chance for authors (or heirs of authors) to recapture ownership of the copyrights to works granted away many years ago, and the window allowed by the law to recapture those rights is now. Recapturing rights can allow for an author or author’s heirs to negotiate better deals with higher royalty splits in their favor, sell catalogues for large sums of money, or finally regain control of how a catalogue is exploited and increase profits with the right team in place.
However, recapturing rights is a complicated business filled with many requirements and nuances. Here are six things authors need to know about recapturing rights.
An author (or author’s heirs) can terminate grants of copyrights made before January 1, 1978 during a window beginning 56 years and ending 61 years from the original copyright date. However, notice of termination must be served on the current owner anytime between ten and two years before the date the author intends the rights to revert. For grants made after January 1, 1978, the calculation of when rights can be recaptured is based on the date of the grant, not the original copyright date. These post-1978 grants may be terminated beginning at 35 or 40 years after the grant date (depending on the language in the grant)with a five-year termination window. Again, notice of termination must be served on the current owner anytime between ten and two years before the date the author intends the rights to revert.
Being proactive is one of the most important factors when it comes to recapturing rights. As mentioned above, serving notice on the current owners of the copyrights is required to recapture rights. Because of the additional requirement that this notice must be sent between ten and two years beforethe date the rights will revert, anyone intending to recapture rights must look at leasttwo years ahead. If someone intending to recapture rights misses the notice window – rights cannotbe recaptured and the opportunity is forever lost.
Works for Hire Need Not Apply
U.S. Rights Only
The termination provisions that are the subject of this article are part of United
States Copyright Law and therefore only apply to U.S. rights. That means one can recapture U.S. rights, but not foreign rights. Also, as of this writing, the chance to recapture is only applicable to U.S. contracts.
Masters are an Uphill Battle
Most discussions around recapture of copyrights refer to composition copyrights because compositions are generally more straightforward to recapture than master recordings. Most record company contracts say that masters are works made for hire for the record company, and as explained above, works made for hire are not eligible to be terminated. However, copyright law dictates that works made for hire must meet certain requirements to qualify as a work made for hire: (a) it must be made by an employee within the scope of their employment, or (b) it must be specially commissioned by the owner of the work for hire, it must be agreed in writing, and the type of work must fall within one of nine categories designated by the law. “Master recordings” is not one of those nine categories.
While there have been a few instances where labels have quietly relinquished rights to masters and sworn all parties to secrecy, most record labels refuse to release rights to masters and instead negotiate with the artist to increase their royalty rates. A higher royalty rate does not help artists whose masters are not being exploited and not earning money, but it is all in an effort for the labels to avoid setting a precedent. Master recordings are record labels’ main assets and businesses cannot give away their assets without also giving away power and profit.
Unfortunately, this is an issue that will only be decided by litigation and/or copyright reform, and neither of those has happened yet.
For pre-1978 grants, one author’s share may be terminated, rather than requiring co-writers to terminate together. However, if an author’s heirs are the ones effecting termination, then a majority of those heirs must terminate together.
Post-1978 grants signed by more than one author require a majority of those authors to terminate the grant together, and if any one of more of those authors is deceased, then a majority of the heirs of each deceased author must sign instead. However, there are exceptions to this rule if separate grants were signed.
Requiring multiple parties to sign the termination notices can be problematic if co-writers, or heirs fighting about estate issues, no longer speak. Even if the parties may have lost touch over the years, it benefits everyone involved to coordinate and cooperate to recapture rights.
Don’t Try This at Home, Kids
If not already apparent by reading this article, assessing eligibility for filing terminations and carrying out the proper procedures to recapture rights is extremely complex. Furthermore, there are numerous nuances and requirements not discussed here that could also affect whether an author or an author’s heirs may recapture rights. Anyone seeking to recapture copyrights needs an attorney specifically focused on the music industry that also has extensive experience with assessing these issues and recapturing rights. Not all entertainment attorneys understand music and not all music attorneys are experienced with terminations.
I regularly recapture rights for my clients, as well as advise them on protecting and revitalizing their catalogues, as I am in a unique position where I am deeply familiar with both older music and how to navigate those catalogues within today’s marketplace. Being in this space also means I frequently see legacy artists and their heirs who have been misguided, who have lost their chance to recapture their rights, who don’t realize their catalogues are under-earning, and who don’t know where to start. The right advisors are tantamount to a successful recapture process and future for the catalogue.
There is only one chanceto recapture copyrights, one chanceto regain control of one’s legacy, and one chance to get it right. Choose wisely.
Post-1978 grants are terminable at 35 years after the date of the grant, however, if the grant’s language includes the right of publication for the work, then that five-year period begins either on 35 years after the date of publication, or 40 years after the date of the grant, whichever is earlier.
U.S.C. 17 §203(a)(3) (1998).
There have been a couple of high profile disputes on this matter involving U.K. contracts (namely Duran Duran in one instance and Sir Paul McCartney in another), but Duran Duran lost in a U.K. lower court and subsequently settled, and McCartney settled without litigation. Some other countries do have their own provisions for recapture of rights, but they vary by country and differ from U.S. law.
Disclaimer: This article does not constitute legal advice.